Blue Cross Of Georgia Hit With Class Action Suit
Story from Atlanta Business Chronicle

Blue Cross Blue Shield of Georgia has been slapped with lawsuit seeking class action by Georgia surgery centers that could cost the state’s largest health insurer tens of millions of dollars.

The suit alleges Blue Cross Georgia has discouraged visits to out-of-network providers by reimbursing procedures at a tiny fraction of “usual and customary” charges.

Blue Cross Georgia spokeswoman Cheryl Monkhouse dismissed the allegations as being without merit and said the insurer plans to “defend the suit vigorously.”

Blue Cross Georgia “is committed to providing appropriate reimbursement for out-of-network services, while at the same time protecting its members and group customers against excessive charges by some non-participating providers,“ Monkhouse said.

The suit is similar to one filed earlier this year by a dialysis provider against Blue Cross. That suit was dismissed.

The new suit, filed against Blue Cross Blue Shield Healthcare Plan of Georgia Inc. and Blue Cross and Blue Shield of Georgia, alleges Blue Cross members paid higher premiums in exchange for the flexibility to receive coverage for care from providers who are not part of the plan’s preferred network.

Blue Cross Georgia has targeted these out-of-network providers, including ambulatory surgery centers, “for a drastic and unprecedented slash in reimbursement to a mere fraction of usual and customary charges,” the suit claims. These actions violate federal and state laws protecting patients and providers, as well as Blue Cross Blue Shield’s contracts, the suit claims.

Blue Cross has cut its reimbursement to out-of-network surgery centers by about 80 percent, said Leigh Martin May, attorney with the plaintiff’s firm, Butler, Wooten & Fryhofer LLP.

Blue Cross “has slashed reimbursement rates to non-member surgery centers making it impossible for their insureds to receive the benefits they are paying for,” May said. “[The insurer] is charging for a service it has effectively eliminated. BCBS should honor the contracts they have made with their insureds.”

Plaintiffs are seeking monetary damages -- which, May said, could run into the “eight figures” -- for Blue Cross Georgia’s alleged failure to pay the contracted reimbursement rate and they are asking the court to force Blue Cross Georgia to honor its agreements.

Earlier this year, Nashville, Tenn.-based National Renal Alliance filed a lawsuit against Blue Cross Georgia, claiming the insurer slashed reimbursement rates for out-of-network dialysis services by 88 percent.

National Renal Alliance was acquired by Renal Advantage Inc. last year.

In March, a federal court judge in Atlanta dismissed the suit, saying Blue Cross’ decision to amend its reimbursement rates for dialysis performed at out-of-network facilities like the Alliance’s did not violate the act’s provisions that prohibit insurers from discriminating against individuals with end-stage renal disease.